Year-on-year growth in global FTKs slowed to 11.0%
in June, down from 12.7% in May, but remained well
ahead of the five-year average pace (3.9%).

All told, industry-wide FTKs grew by 10.4% in annual
terms during the first half of the year (H1 2017) – the
strongest first half of a year since the rebound from the
global financial crisis (GFC) in 2010. Airlines
registered in Asia Pacific and Europe accounted for
two-thirds of the annual increase in FTKs flown during
the period, alongside solid contributions from North
American and Middle Eastern carriers.

…alongside ongoing upward trend in SA volumes

Having risen strongly in SA month-on-month terms in
May, freight volumes tracked sideways in June. The
bigger picture is that freight volumes have continued
the strong upward trend that began in mid-2016.

The stronger economic and trade backdrop…

The resurgence in air freight demand over the past
year or so has been set against a stronger global
economic and trade backdrop.

This is particularly evident in signs of growing order
books for global manufacturers: indeed, the new
export orders component of the global purchasing
managers’ index (PMI) remains close to a six-year
high and crucially above the notional 50-mark that
indicates rising orders. In fact, at current levels, the
measure is consistent with year-on-year FTK growth
remaining robust, in the region of 8%, during Q3 2017.

More generally, the recent outperformance of air
freight relative to wider world trade has also reflected
air freight-specific factors, notably the ability of the
industry to allow firms to restock quickly at the start of
pick-ups in the economic cycle. Indeed, the strong upward trend in industry-wide FTKs has coincided with
a sharp decline in the (US) inventory-to-sales ratio
between May and December 2016.

Industry drivers continue to indicate that the best of the cyclical growth upturn may now have passed.
Nonetheless, the strong upward trend in seasonally adjusted (SA) freight traffic has reasserted itself.